August 20, 2008

Sandwich Maker Solid in Face of Rising Costs

THE owner of the world's biggest sandwich-making plant - which has sites in Crosby and Warrington - said trading had been "solid" in the face of deteriorating consumer conditions in the UK.

Convenience foods firm Greencore, which operates the Manton Wood facility, in Nottinghamshire, said underlying sales at its main division rose 7.2% in the four months to July 31, up from 6% in the first half of its financial year.

Price rises to combat higher costs accounted for 4.2% of the increase, alongside a 3% rise in volumes.

The convenience foods division comprises around three-quarters of group sales, and supplies retailers such as Tesco and Asda, as well as garages and airlines.

It also makes ready meals for Weight Watchers and Heinz. As well as the Manton Wood site, which employs around 2,000 people and makes 4m sandwiches a week, the group operates sandwich making plants at Park Royal and Bow, in London, and Crosby, in Liverpool.

Earlier in the year, the group said it expected to suffer a hit of 57m euros (pounds 44.9m) from higher food costs this financial year, with its recovery "centre stage on our commercial agenda".

Dublin-based Greencore, which has signed a 10-year deal licence to develop a chilled range of food under the Weight Watchers brand in the US, said it was on track to meet market expectations for this financial year to September.

Although underlying sales in convenience "remained solid" in the four months to July", Greencore warned: "Consumer sentiment in the UK has deteriorated markedly since June and poor weather has also impacted demand." It also noted there were a number of "seasonally important" trading weeks remaining in the current financial year.

Greencore also operates an ingredients business - mainly producing malt for brewers - and a food distribution business. These were trading "well", the group said.

Other food producing sites include three prepared meals factories in Warrington, Wisbech and Kiveton near Sheffield, and a chilled sauce and soup plant in Bristol.